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Greg Johnson

Packaging: Special Report 2017

Retailers continue to report rising demand for packaged fruits and vegetables, though the twin attributes
of convenience and value offer different motivations.

Produce Retailer conducted its annual survey on Packaging and surveyed 150 buyers, of which, 60% were supermarket retailers and 27% specialty produce stores. In the survey, 76% said they sell packaged produce, a similar number to previous years. Of those, 12.5% said they are selling more than 25% more than a year ago, and 63% said they’re selling 1-25% more than a year ago. Only 8% said they’re selling less than they did a year ago. The main reason for the increase? Convenience. A whopping 73.5% said convenience is their customers’ primary driver for purchasing packaged produce, followed by 11% preferring single-serve sizes, 6% on food safety, 4% for the value and 6% other reasons.

But that number doesn’t match up to consumer expectations as found in The Packer’s 2017 Fresh Trends consumer survey.

When asked to name the top three advantage of packaged fresh produce 63% said convenience, while 43% said value. Following those were 27% freshness, 21% safety, 21% health and 13% don’t know or other.

For the most part, retailers in the packaging survey say they don’t charge significantly more compared to bulk. Input costs vary for packaged produce, whether done in store or off-site or by suppliers. But 13% of retailers reported they charge 1-10% more for packaged than bulk; 27% said 11-20% more for packaged; 15% for 21-30% more.

While 19% said they charge 31% or more for packaged over bulk, 13% of retailers in our survey said they charge consumer nothing extra for packaged over bulk.

Top seller shifts

The past few years the top four selling value added items were watermelon chunks, fresh-cut fruit, fresh-cut vegetables and berries, but that changed this year.

The top two selling items in this year’s survey were fresh-cut vegetables and berries, at 21% each, when asked what their top selling value-added packaged items were in terms of units sold. Rounding out the top five were fresh-cut fruit mix at 18%, watermelon chunks at 12% and pineapple chunks at 11%.

Salad changes

In the 2016 survey, we noticed retailers said for the first time that salads in clamshells were the top selling packaged salads in their stores with 51% saying clamshells were tops compared to 46% saying bags.

But in the 2017 survey, bags returned to the top selling packaged method in a big way, with 57% or respondents saying they were the top seller compared to 35% saying clamshells.

Salads are definitely growing, and it’s not from traditional lettuce in bags. According to Nielsen data for the 52-week period ending Aug. 26, the category was worth nearly $4 billion in annual sales, which represents a 5.7% increase from the previous year, while the category grew 6.6% by volume to 1.4 billion units.

Though not specifically broken out, it’s clear by the introduction and success of various chopped salad products, the higher end flavor mixes are invigorating the category, and they’re often found more in bags than clamshells.

Beyond salads

Retailers were asked how well certain packages are doing in their stores on a 1-5 scale. Cello bags, see left, are still a popular choice, as are clamshells. Stand-up pouches are gaining in popularity, with only 29% of retailers surveyed reporting negative results. Over-wrapped also were a strong performer, with 42% of retailers rating them favorably.

Not so green?

“Eco-friendly” fiber-based packaging proved to be least popular in our survey with 53% of retailers saying they don’t use them, 9% saying they didn’t sell well, 17% selling OK. Just 15% said fiber-based packaging sold well and only 5% said it sold very well.

Going back to Fresh Trends 2017, we asked consumers to name up to three things that affect their decision to buy packaged fruits or vegetables.

Like the similar question of advantages to packaged, 64% said price affected their decision followed by 53% saying convenience. Rounding out the reasons were 40% saying they’re looking for health, 34% said they try to buy produce in its natural state, but only 16% were concerned about environmental factors.

Consumers no doubt care about the environment, but these surveys show not as much as value and convenience, and retailers seem to know that.